DA.C - View Single Post - Colombian Airline/Liquidated: 749 Employees Cut

Unicorn · 08-20-2003, 08:44 PM

Avianca is flirting with going down the drain, and deservedly so.

It has always been indifferently managed, and the current management team did not se any need to try and improve operational efficiency post 911.

When things got difficult they demanded their lessors unilaterally reduce rentals on the aircraft they had leased in.

Nothing about stepping the lease rentals back up later, or lease extensions to ensure that the lessors managed to make some money on the deals, it was "cough up or else".

When the lessors who had aircraft with them said "what else?", Avianca filed for Chapter 11 bankruptcy, despite not being a US airline or owned by a US company.

It claimed that as it had a minor subsiduary in the US, flew to the US and because most of its creditors were US based, then it could claim C11 protection.

Several of their lessors are fighting this in court, and I damned well hope they win. This is jurisdiction shopping of the worst kind.

If this manages to get past then every half-way dodgy airline will set up US "subsiduaries" so they can use the Chapter 11 rules to their advantage.

I don't want to see a great old airline go under, but I also don't want to see lease companies go down due to airlines dodging their responsibilities

Unicorn

08-20-2003, 08:44 PM	#3
Unicorn 1:400 Leasing Agent Join Date: Mar 2003 Posts: 1,141	Not just for the best, but overdue Avianca is flirting with going down the drain, and deservedly so. It has always been indifferently managed, and the current management team did not se any need to try and improve operational efficiency post 911. When things got difficult they demanded their lessors unilaterally reduce rentals on the aircraft they had leased in. Nothing about stepping the lease rentals back up later, or lease extensions to ensure that the lessors managed to make some money on the deals, it was "cough up or else". When the lessors who had aircraft with them said "what else?", Avianca filed for Chapter 11 bankruptcy, despite not being a US airline or owned by a US company. It claimed that as it had a minor subsiduary in the US, flew to the US and because most of its creditors were US based, then it could claim C11 protection. Several of their lessors are fighting this in court, and I damned well hope they win. This is jurisdiction shopping of the worst kind. If this manages to get past then every half-way dodgy airline will set up US "subsiduaries" so they can use the Chapter 11 rules to their advantage. I don't want to see a great old airline go under, but I also don't want to see lease companies go down due to airlines dodging their responsibilities Unicorn __________________ It is by will alone I set my mind in motion. It is by the juice of sapho that thoughts acquire speed, the lips acquire stains, the stains become a warning. It is by will alone I set my mind in motion. PS. Buzz paranoid and proud of it!